Subscription boxes have been a growing ecommerce trend over the past few years, and they’re not going away any time soon. You might be familiar with some of the biggest names in the industry, like Dollar Shave Club, Blue Apron, or Stitch Fix. But it’s not just the big name brands that are cashing in on this $2.6+ billion industry. Many of our small business clients have seen success with the subscription business model.
Have you considered adding this type of recurring revenue to your own business? Here’s what you need to know about growing your creative business with subscription boxes.
How to get started selling subscription boxes
You’ll also need software and tools in place that will help your subscription box business run smoothly. We believe that Shopify is the best ecommerce platform for small businesses, including those that sell subscriptions. You can check out all of our reasons why here. Shopify integrates seamlessly with some of the best tools for selling subscriptions; many of our clients use ReCharge to simplify the way they manage their subscription business.
Some other things to think about before adding subscriptions to your business model include:
- Where will your products come from? Are they existing products you already sell or make, or will you be curating products from other vendors?
- How often will you ship your box? Is a monthly, quarterly, or bi-annual shipping schedule best for you and your customers?
- How will you package your subscription box? (The unboxing experience is often part of the appeal for subscription customers, which is why Bosq came to us prior to launching their gift box company for brand identity and packaging design.)
- How will you market your subscription box? Do you plan to use influencers, affiliates or referrals? Will you have a budget for Facebook Ads or Google AdWords?
What our clients have to say about selling subscriptions
We’ve worked with a number of clients — including Sugar Paper, Raddish, and SmartyPits — who sell subscriptions, either as their primary business model or as part of their overall business. We recently caught up with each of these business owners to learn more about how they have used subscriptions to grow their companies.
A new revenue stream for stationery brand Sugar Paper
Already a successful stationery brand with multiple retail locations in Los Angeles, Sugar Paper came to us in need of a custom Shopify website. Along with their new ecommerce site, we also helped them prepare to launch a new subscription service.
How has selling subscription boxes impacted your business?
Selling subscriptions has given us a reliable and steady extra bit of income every month and it’s given us something exciting to talk about on our marketing channels. It’s a new way to connect with repeat customers and it’s opened up a new dialogue that helps us find out what is working for them and what is not.
What made you decide to sell subscriptions?
Customers in our retail stores have asked us to do it for years and with Aeolidia’s help we were able to implement it in time for our website’s redesign.
What have you learned since starting to sell subscriptions?
We’ve learned that there is a market for a repeat customer to receive a curated collection monthly. It means to us that these customers are so invested in our brand that they will trust us to send them products we know they’ll love, and that means so much to us.
We’ve also learned that asking questions helps, a lot! We will often reach out to our subscribers for feedback and they are always so generous with their time and insight. It’s the most important information we can gather as retailers.
What has the customer response been about your subscriptions?
The customer response has been very positive and the unboxing experience has been a very personal and exciting event for our customers. We love seeing videos of them opening their orders on Instagram and we really love when they take the time to send an email or make a phone call to let us know they loved it.
A cooking club for kids, with subscriptions at the heart of the business model
Raddish offers “a cooking class in a box featuring delicious lessons and skill builders” for children. Each month they send out a different themed kit, inspired by everything from “Edible Experiments” to “Ticket to Japan.” As CMO Seth Barnes told us, “It was a choice from the beginning because we truly wanted to teach kids how to cook…and that takes a little time!”
How has selling subscriptions impacted your business?
Subscriptions are the key to our business model. While we create a cooking kit every month, what we’re really doing is enabling an experience for kids and families every month and we look at that horizon when thinking about kit content.
Has anything surprised you about selling subscriptions?
It’s not a surprise, but there’s a real long-term obligation you have to the customer once they give you their hard-earned money. You have to keep earning it through every part of the experience: fulfillment, customer service, product quality and supplemental/value-added materials.
Which Shopify apps or other tools are you using to offer subscriptions to your customers?
We use Chargify to run subscription billing and management.
What has the customer response been about your subscriptions?
Generally people love it because it gets them into the kitchen actually doing the stuff they want to do. Somehow the form factor of the kit and the community that’s also out there cooking the same recipes alongside your family is what motivates people. Whereas just printing a recipe from a Google search or Pinterest doesn’t have the same kind of impact.
A narrower focus and new name as SmartyPits launches subscriptions
We first worked with Stacia Guzzo to develop a new brand identity, product packaging design, product photography, and custom Shopify website for her company Handcrafted HoneyBee. After the incredible success she saw following that project, Stacia decided to narrow her focus even further. She recently consolidated her product collection, focusing on her popular line of aluminum-free deodorants. She renamed them SmartyPits, created a subscription offering, and launched a new Shopify website designed by Aeolidia.
What made you decide to sell subscription boxes?
When we first started our subscription program, SmartyPits wasn’t available in very many retail locations. Because of this, we had to rely on the customer remembering to order their SmartyPits online at least a few days before they ran out of the previous stick — if they forgot and waited until the last minute, it opened up 2-3 days when they would have to find an alternative. We didn’t want them to be looking elsewhere for their deodorant, even for a few days! So the subscription was the perfect solution for that.
It also gives us the chance to reward our most loyal customers: in exchange for their pledge to purchase our deodorant every few months, we are able to give them 10% off and free shipping for each subscription order.
How has using the subscription business model impacted your business?
One of the best things about any recurring revenue stream is dependable income. This means I can more accurately budget, create reliable projections, and plan to have certain amounts of raw materials & finished inventory in stock.
It also helps with the ebb and flow of buying seasons–while deodorant in general isn’t a hugely seasonal product, there are times of the year when people are more or less ready to spend. Having a solid subscription system in place makes those buying cycles far less stressful.
You moved from Bold to ReCharge to manage your subscriptions with the launch of the new site. Can you share why you decided to change, and how ReCharge has been working for you?
We’re about 4 months into working with ReCharge, and so far I’m very pleased. I think both apps have their pros and cons, but on the whole ReCharge has been a better solution for us. At the end of the day, with Bold we had too many customers that were having confusing user interface experiences.
As we grow our subscription platform, we want the user experience to be as clear and easy as possible — a solution that ReCharge has provided for us.
I especially like that ReCharge can give us a direct link to any customer subscription portal, which means they don’t have to be logged into their account to change their subscription (as long as they have access to their portal link).
What have you learned since starting to sell subscriptions? Has anything surprised you about selling subscriptions?
We learned one big lesson the hard way: ReCharge gives you the option of making the subscription option the default. We tried this for a few months, hoping that perhaps it would encourage people to consider subscribing as their first option. Unfortunately, we learned that a lot of people don’t read through their options–and even though we thought we had made it clear in several steps along the purchase funnel, we still had people saying they never meant to sign up for a subscription and wanting to know why they were getting a subscription reminder. Unfortunately, this also meant we covered the 10% off and shipping cost of their first order…and they never made it to the second because they wanted to cancel the subscription they never meant to fill. It increased our churn rate, and it was a lose-lose on both sides. We recently changed the default choice back to one-time purchase for that reason.
On a brighter note, I will say: many of our subscription customers are our most loyal customers, and I love to treat them that way. We have special boxes, stickers, and notes that I use exclusively for subscription packaging. Every once in a while we’ll throw in some surprises for them, too. It’s fun to honor these customers who commit to using SmartyPits exclusively!
Besides ReCharge, are there any other tools are you using to offer subscriptions to your customers?
We use ReCharge for our primary subscription app, but I’ve also found some integrations I really like. For example, we use Gorgias for our customer service platform, which syncs with both Shopify and ReCharge. A customer’s entire purchase history is listed in a column when an email from them comes through, including their subscription history and current status. If they want a change in the subscription, you can do a lot of it right within Gorgias without having to go into Shopify and then ReCharge. It’s a great integration!
What has the customer response been about your subscription boxes?
I’ll be honest – I think in my space, subscriptions are more of an expectation than an exception. For the most part, I think customers appreciate that the subscription option offers them savings, but I also think it’s somewhat expected for a product like mine.
How could subscription boxes help you grow your business?
Thinking of adding subscriptions to your business model? We’ve worked with plenty of creative business owners who sell subscriptions on everything from their gift box packaging design to custom Shopify solutions. Whether subscription boxes are already a part of your ecommerce strategy or a new revenue stream you’d like to explore, we can help!
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